For new Ofgem chief the heat is on

The speculation is finally over. Ofgem has named Jonathan Brearley as the man set to take on arguably the toughest job in regulation right now. And the heat is already on. In fact, as hot seats go, this one is fairly off the scale.

Becoming chief executive of Ofgem at a time that even his chairman has branded one of “unparalleled change” will require an exceptional skill set, and a far-reaching vision of how industry might meet the great unknowns ahead on the UK’s critical journey to net zero.

He will need to be an arch diplomat, too, if he is to bring together a fragmented sector facing a gamut of ongoing challenges of its own. Shifing regulatory conditions, squeezed margins, unwelcome government interventions, bruising price controls and political and economic uncertainty increasingly equate to, as one source I spoke to this week put it, energy’s “new normal”.

Add to this a transforming renewables landscape, suspended capacity market, the urgent narrative around addressing resilience, and the relentless rise of consumer needs and expectations, and it’s one big in-tray.

But this will not be uncharted territory for Brearley, Ofgem’s current executive director for systems and networks, who masterminded electricity market reform (EMR), led the RIIO2 network price control programme and was a strategy director at the former Department of Energy and Climate Change.

He is already on top of the brief, which was likely a key advantage at interview during a time when evolution not revolution may be viewed by Ofgem’s upper echelon as the safest way forward.

Conversely, the ripple of anti-climax in certain quarters following the announcement suggests some see a missed opportunity for a much-needed regulatory shake-up.

But perhaps Brearley will have learnt some lessons. It was noticeable, for instance, that in a Utility Week interview in 2014, Brearley shared how, looking back on EMR, he “could have made some decisions faster, which would have got the schemes in a little bit quicker”. Nimble decision-making will be vital for the new regulator as he comes under increasing pressure in the months and years ahead. There will be no time for a honeymoon period following Dermot Nolan’s departure, possibly as early as February.

With one energy retail chief executive recently characterising the struggling sector as being “on fire”, it looks like it will be all hands to the pump.